Gabriel_Annual_Report_2024-25 - Flipbook - Page 11
CONTENTS // MANAGEMENT COMMENTARY // FINANCIAL REVIEW
• Loss before tax was DKK 13.7 million (negative DKK
11.9 million)
• Loss after tax was DKK 17.3 million (negative DKK 14.2
million)
• Cash flows from operating activities were positive at
DKK 18.4 million (negative DKK 8.8 million).
FurnMaster realised a revenue decrease of 9.8%, which
is in line with the general market development.
However, FurnMaster in Europe delivered revenue on a
par with last year, which underlines the strong performance of the European units. The European business
also delivered better operating profit, a satisfactory operating margin and a strong cash flow.
The negative development in FurnMaster’s total revenue
is thus the result of a revenue decrease of 35% in North
America. This is attributable to the current restructuring
of FurnMaster in Mexico where selected sales contracts
are being terminated and the unit adjusted to a lower
level of activity.
The contractual bases were renegotiated during the
year and where economically viable solutions could
not be found, phasing out of product or customer relations was initiated. The phasing out takes due account
of Gabriel’s obligations to customers, suppliers and
inventories.
A number of other restructuring costs were also incurred
as a result of a reduction of the organisation, leases etc.
The consequences of this process were a negative contribution to the profit but also a reduction of the cost level
and statement of financial position, which increases the
possibility of completing a sale of FurnMaster in Mexico.
Conclusions from the external forensic investigation
initiated to clarify the circumstances of the errors
arising in Mexico
See also the regular reporting during the year, in particular the detailed review in connection with the publication of the company’s Q3 report 2024/25.
Receivables amounted to DKK 45.8 million on 30
September 2025, compared to DKK 58.9 million on 30
September 2024, a decrease of 22.2%.
The irregularities found in the Mexican FurnMaster
company in connection with the annual report for the
2023/24 financial year and the major consequent corrections which affected both the 2023/24 financial year
and previous years prompted a thorough external forensic investigation. This investigation was completed in the
2024/25 financial year.
Statement of financial position
Management assesses that the estimated fair value
less expected sales costs is not lower than the carrying
amount. This assessment is based on EBITDA multiples
which are supported by the results realised in 2024/25,
the expectations for 2025/26 and an assessment made by
external advisers. We refer to the impairment test below
regarding goodwill and deferred tax assets, which is also
supported by expected multiples on a sale of the units.
Management has assessed individual assets which resulted in impairment write-down of goodwill and customer contracts.
Liabilities related to assets held for sale amounted to DKK
70.7 million (2023/24: DKK 63.7 million). The increase is
primarily related to an increase in lease commitments
arising mainly from lease extensions.
The analyses conclude that discrepancies were found
between the statement of financial position in the consolidated reporting and the statement of financial position in the local bookkeeping system. The errors arose
in April 2019 and continued until they were discovered in
September 2024 and corrected as part of the 2023/24
annual report. The discrepancies were caused by system
errors and a number of incorrect manual postings. The
nature of the errors is judged to be such that they should
have been detected earlier through internal financial
controlling and planned actions performed when presenting the Group’s financial statements.
Prompted by the analyses and conclusions made, management has reviewed and updated internal business
processes and procedures and strengthened the systemic integrations and controls to prevent the risk of
similar errors in future.
Based on the analyses made in the external report and
the reviews and internal audit procedures performed
during the financial year, management considers that
the corrections made in connection with the financial
reporting for the 2023/24 financial year provide a true
and fair view.
We also refer to note 9.
Intangible assets were DKK 28.5 million on 30 September
2025, of which goodwill from the acquisition of Screen
Solutions Ltd accounted for the biggest share (DKK 23.0
million).
Property, plant and equipment amounted to 70.0 million
on 30 September 2025, compared to DKK 63.6 million in
the previous year. The development is primarily due to
reinvestments in lease assets.
Other non-current assets were DKK 6.7 million on 30
September 2025, compared to DKK 6.5 million on 30
September 2024. Non-current assets were thus DKK 105.2
million on 30 September 2025, compared to DKK 105.2
million at the same time last year.
The inventories in discontinued operations amounted to
DKK 63.7 million on 30 September 2025, compared to DKK
87.0 million on 30 September 2024, a decrease of 26.8%.
The Group's sales activities
Management notes that the international demand for
contract furniture, which is the Group’s primary market,
continued a downward trend in 2024/25.
For a number of years, the Group has pursued a growth
strategy of “growing with the largest market participants”,
which continues the targeted effort towards selected key
accounts. Execution of the strategy secures the Group
a strong position in the fabric programmes that are an
integral part of the furniture manufacturers’ standard
product offers. It also ensures that new products are
largely developed in close collaboration with these furniture manufacturers.
For several years, management has given high priority to investing in increases in sales resources and customer-facing activities and in increasing our structural
global presence. Dedicated Key Account Managers are
responsible for developing customer relationships with
the world’s leading furniture manufacturers and ensure
the involvement of the Group’s other competences within
design, marketing, quality, logistics etc.
The strategy is working and continually strengthens
Gabriel’s position on the market, with the establishment
of showrooms, increased digitalised marketing activities,
personal sales development from Field Sales Managers
and global customer service.
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